The Rub: Remodel or Move?

The residential real estate market will be affected by the wave of retiring baby boomers in the coming decades. This will become increasingly the case as they opt to work longer or phase into retirement and alter the definition of “retirement locale” by flocking to cities with affordable housing, recreation, and healthy job markets. Most retirees prefer to age in place and increasingly are remodeling their homes instead of selling and downsizing. At the same time, they are playing a role in where assisted living facilities are being built as they care for their aging parents. National Association of Realtors chief economist Lawrence Yun says, “Multiple trends are happening at the same time.” A list compiled by NAR of markets attractive to baby boomers between the ages of 60 and 69 includes Sun Belt cities in Florida and Arizona as well as such locales as Boise, Raleigh, and Chattanooga known for affordable housing and low taxes. “They can trade down, using equity in their home to fund their retirement lifestyle,” as well as supplement their retirement savings with a job, Yun notes. For those staying put, Harvard University’s Joint Center for Housing Studies reveals that fewer than 25 percent of homes occupied by people age 55 and older have no-step entry ways, first-floor bedrooms and bathrooms, wider hallways, and other such features, which necessitates significant remodeling. Some homeowners find that adding elevators is less expensive than building a first-floor master suite, but those living in a split level would find it more cost-effective to move than remodel. | Read More